For Parents: Teaching Children the Financial Facts of LifeShowing the importance of saving, spending wisely and sharing with others

We try to teach our kids to be street-smart and use good manners, but teaching them the financial facts of life can be difficult. To help parents, guardians and even grandparents raise responsible money-managers, FDIC Consumer News offers the following suggestions.

Play "show and tell" while you manage your own money. If you expect your kids to become responsible with their money — and yours — practice what you preach. Serve as a good example of what it means to save, spend wisely and share with others. You'll make more of an impression on your children if they can see and hear what you're doing to manage your money.

So, take your child along on shopping trips and discuss what makes some items "too expensive" and others "good buys."

Also take your child to the bank. Note the variety of services provided by visiting different departments of the bank. Explain basic principles, such as how money deposited in insured accounts is protected by the government against loss.

Around the house, let your child help with simple tasks associated with preparing deposits or investments, or balancing the checkbook. As you pay your bills, especially the ones for your credit cards, explain how debts must be repaid on time or you can face additional fees and have trouble getting a good loan in the future.

Also discuss your charitable contributions and why you are making them. Ask your child for input on which charities to support. He or she also can help you prepare contributions, even if just by stuffing checks into envelopes.

Help your child start a savings or investment account. Young kids will enjoy saving money in piggy banks, but at around age eight, think about helping them open a small savings account. That way they also begin learning what banking is all about.

Many parents reward their children for sticking to a savings plan by matching or adding to what the child contributes.

As children get older, discuss the pros and cons of owning investments, such as stocks, bonds and mutual funds. Investments can produce higher returns than bank deposits over the long term, but remember that investments can lose money and they are not insured by the FDIC.

Give an allowance. If used as a teaching tool and not a giveaway, an allowance can be one of the best ways to teach kids, even as young as five or six, about money management. It also allows children to experiment with money management and learn from their mistakes without losing too much in the process.

Encourage them to decide in advance how much should go into savings (which reinforces the concept of "pay yourself first"), how much should go into the spending pile (for their use as "pocket money") and how much should be set aside to share with others — for charity or birthday or holiday gifts. Giving an allowance in small bills or coins also allows them to easily set aside the portions for the different purposes.

Consider gifts that encourage saving. Examples include U.S. Savings Bonds and books that reinforce financial responsibility.

Encourage older children to get work experience. Summer or part-time jobs can teach young people good business skills and how to be responsible. They also may enjoy earning and saving money.

For more help or information for parents: The FDIC has a new financial education program for youths between the ages of 12 and 20 that is primarily for use by teachers but also can help parents explain the basics of good money-management to their children. You can order a free CD of the FDIC's "Money Smart for Young Adults" at www.fdic.gov/consumers/consumer/moneysmart/young.html.

Find other resources on money management for youths from the Jump$tart Coalition® for Personal Financial Literacy, which consists of more than 180 national partners, including the FDIC (go to www.jumpstart.org), and the money pages at www.kids.gov, a federal government Web site for children and educators.